Fixed at Last

Fixed at Last, Fixed at Last, Oh Thank God…

It’s Fixed at Last

Laurie MacNaughton

And…it’s official: June 12, 2015 the Department of Housing and Urban Development released a new policy statement addressing – and yes, FIXING – a longstanding issue with older reverse mortgages that included a Non-Borrowing Spouse.

Non-Borrowing Spouse (NBS) was a status assigned a spouse too young to be included on a reverse mortgage, or a spouse who opted to be removed from title during the reverse mortgage origination process. Reverse Mortgages originated after August 2014 did not have a Non-Borrowing Spouse option.

Unless sufficient pre-planning had been done to prepare for issues that might arise upon the death of the older spouse, when the title-holding spouse died the Non-Borrowing Spouse could be left facing a tough outlook: s/he had either to refinance the loan into his/her own name, or to sell the home. If s/he didn’t – or couldn’t – do either, the lender was required to begin foreclosure proceedings.

Under HUD’s new policy, the Non-Borrowing Spouse may remain in the home following the death of the borrower, even if the loan’s current balance exceeds the loan’s original principal balance.

Securing this new legislation involved a very long, very hard-fought battle by members of the reverse mortgage profession, certain lawmakers, and private citizens. But, thankfully, the longstanding issue is resolved – and some 12,000 Non-Borrowing Spouses are now on solid ground.

Questions? Give me a call. I always love hearing from you.


Laurie MacNaughton [NMLS# 506562] is a freelance writer and a Reverse Mortgage Consultant at Southern Trust Mortgage. She can be reached at: 703-477-1183, or

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